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Similar to Victor Perton\'s Presentation to Export to the USA Seminar for Business VictoriaSept 2011
Similar to Victor Perton\'s Presentation to Export to the USA Seminar for Business VictoriaSept 2011 (20)
Victor Perton\'s Presentation to Export to the USA Seminar for Business VictoriaSept 2011
- 1. Victor Perton Commissioner to the Americas Victorian Government Business Office, San Francisco, CA
- 6. Destination of Victorian Goods Exports
Editor's Notes
- US Growth rate increased from 3% in 2003 to 4.4% in 2004 which was the highest GDP since 1999 under President Clinton. That being said the fourth quarter rate was only 3.1 % which dragged down the year in total.
- US Imports are impacted by rising oil prices which averaged US $26.98 dollars a barrel of crude in 2003 rising to $34.47 per barrel in 2004. Historically Agriculture is usually a net gain for exports. US consumers are used to a wide variety of imported goods from around the world. China continues to be a growing reason for the US trade deficit and as long as China refuses to devalue the Yuan this will be continue to be a problem for the US.
- US Currency will continue to remain low vs. world wide currencies due to a number of factors such as the need for borrowing huge sums of money to finance the deficit, Worldwide financial markets concern over huge deficit, US Government desire to keep dollar low to assist US exports and increase the cost of imports hopefully reducing the large trade imbalance The Australian exchange rate which made exports to the US relatively cheap as little as 2-3 years ago has diminished significantly. The Aussie dollar has strengthened more against the US dollar than other major currencies (as you can see from the graph showing the trade-weighted index) In 2005, the Australian dollar is expected to remain strong against the US dollar World players such as China and India continue to flex their manufacturing and service might, impacting profit margins for all countries and making Australian goods and services seem like less of a bargain than they may have in the recent past.
- The US represents a bigger export market for Victorian goods than China or Japan Over the past three years, exports to the US have remained largely static; this is in line with Victoria ’ s export performance generally Last year, Victorian exports to the US were dominated by traditional commodities and primary resources such as: Meat ($433 million) Crude petroleum ($132 million) and Wheat ($70 million) As well as elaborately transformed manufactured goods such as: Automotive parts ($213 million) and Aircraft parts ($101 million) A number of aerospace component suppliers such as Hawker de Havilland are currently working on major contracts in the US $300 billion Joint Strike Fighter (JSF) program Other significant exports include scientific instruments and pharmaceuticals The big success story is Victorian wine with exports to the US increasing from $41 million in 1999 to $153 million in 2004, a fourfold increase Services exports to the US, although a little harder to measure, are also on the increase.
- I found it interesting that according to an Austrade survey, only one quarter of Australian companies believed the AUSFTA would have a positive impact. ( Tim Harcourt, Chief Economist Austrade) I am sure our keynote speaker, Alan Oxley, and my colleagues from Austrade, will explore that issue further.
- I found it interesting that according to an Austrade survey, only one quarter of Australian companies believed the AUSFTA would have a positive impact. ( Tim Harcourt, Chief Economist Austrade) I am sure our keynote speaker, Alan Oxley, and my colleagues from Austrade, will explore that issue further.
- Those of you who have met or worked with US sales people know what to expect. They know their products, they know their competitors products and pricing and they know what their clients pain points are. You need to know all of this before you make the first call as you often will not get a second chance. Worker productivity growth in the US is world class and has been rising steadily over the past 10 years. Everyone that has a job is expected to contribute more than in the past in order to keep their jobs – respect that fact and be prepared. Know what you ’re value proposition is to each potential client before you call. Preparation is a critical key to success. Teaming with and utilizing US sales people is extremely important and will reduce your learning curve.
- Sure the US is the biggest market in the world but every business person in the world knows that and they all want to sell products and services here. If I had a dime for every company that comes to me and says we don ’t have any competitors in the US I’d be a millionaire. The fact is 99% of Australian companies do have competitors - they just haven ’t done their research. The US is all about “what have you done for me today and what are you going to do for me tomorrow” Everyone expects companies that work for them in any capacity to fix any problems NOW. Excuses about time zone differences and shipping times will not cut it. If you do not have distributors / personnel on the ground in the US ready at your clients beck and call – they will not be your customers for long. All US buyers expect a “bargain” Why should I deal with you when I have been buying from XYZ widget manufacturer? What can you do better, cheaper and faster? And don ’t talk to me about single digit savings – it isn’t worth the paper work to change!!
- I often see business plans with numbers that go through the roof in no time. My first comment is often “those numbers look great but what cloud did you pull them from?” My second question is “if you think those numbers are realistic then who are your prospective clients and why are they going to buy from you?” Be realistic, if you ’re not ready to sustain losses in the US for the first year or two of your market entry, you’re probably not ready to start selling here. That being said, make your buck go further by getting all the free money and assistance you can from the government. There are many different export assistance plans from the Access America program to Austrade to outright government grants for going to trade fairs and doing market assessments. Don ’t count solely on your in-house staff to develop market research. Have them do the initial market research and then look to the experts to fill in the gaps. Do as much research at home as possible before you go to the US because it is very expensive to come here un-prepared.
- One of the most critical elements of any US market entry strategy is your sales team. I don ’t care whether you’re using distributors, agents or a new sales force you have created in the US, you must focus on their training first and foremost. Consider what training you presently provide your Australian staff and double it. Your new sales team will need to overcome cultural differences and change marketing material to fit the US. Plan on numerous visits the first year or two in which you will accompany your sales force on US client calls. You must understand and know what your US clients expectations are and how your sales force should position your product or service in order to succeed. Be ready to accept and in fact encourage constructive criticism on your product and marketing material. It is much better to find out from your sales force what you need to improve on rather than lose a prospective client because you did not properly position your product. Again and again I see Australian business plans that ignore or at best play lip service to their sales teams. It is one of the greatest reason ’s for the failure of an Australian entry strategy and can not be underestimated. Quite often I get calls from Australian companies that say our market entry strategy is failing because we picked a poor distributor. I then ask them how many sales calls they went on with their distributor how many conference calls with clients they participated in, how often they checked in with their distributors to see how they were doing and what difficulties they could help with. You would be amazed to hear how often they “hire” a distributor, throw him a few brochures and then sit back and wait for the sales to pile up!!! This is crazy and a sure fire way to fail!! Work your US sales force and treat them like your most important client.